The Bank of England is expected to maintain current interest rates in an announcement on Thursday, despite a fall in inflation.
Inflation fell to 3.4 per cent in February – down from 4 per cent in January and the lowest since September 2021, when it was 3.1 per cent.
The positive news on Wednesday comes ahead of the BoE’s latest interest rate decision at noon, with policymakers widely expected to keep rates on hold at 5.25 per cent.
In February when the group met, only one of them, Swati Dhingra, voted to cut rates, two voted for a rise, but the rest said they should stay at 5.25%.
Robert Wood, chief UK economist at Pantheon Macroeconomics, said he expects the same vote this time.
The BoE said in February that it expects inflation to fall back to its target of two per cent between April and June this year, about 18 months earlier than it previously forecast.
Rishi Sunak has been buoyed by the inflation drop with Chancellor Jeremy Hunt hinting the improved economic picture could result in pre-election tax cuts and reductions in interest rates.
